Rice To Average US$10.75/cwt In 2010

On a very short-term basis, front-month (September) rough rice could be due a breather given that the most recent leg down has plunged daily momentum indicators back into oversold territory. An unwinding of oversold momentum could buoy prices back up to the US$11.00/cwt area. However, we would expect any bounce to be temporary and within the confines of the multi-month channel downtrend. Indeed, given that prices have decisively pushed below multi-year support around US$11.00/cwt, our short-to-medium term bias remains to the downside. In fact, we see potential for further downside in the coming months towards the next key level of support around US$7.90/cwt.

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